PCG changes
Pick any two versions below to diff them.
- Price
- $13.13 → $13.18(+0.4%)
- Next earnings
- Oct 22, 2026 → Jan 22, 2027
- Next earnings is estimate
- No → Yes
- Thesis
- PG&E carries a wildfire liability that most other regulated utilities do not face in the same way. California's inverse-condemnation rule can make PG&E pay for fire damage even without proven negligence. The 2019 bankruptcy showed that one bad fire season can erase years of profit. In 2025, lawmakers extended the Wildfire Fund with SB 254, but they kept inverse condemnation. In 2026, a reform bill, SB 492, did not get a final vote before the Assembly adjourned on September 1. PG&E then cut about $2 billion of planned 2027 capital spending, suspended its long-term growth outlook, and started a strategic review of its structure. For the gap to close, lawmakers need to pass a durable reform, such as a liability cap or a faster victim-payment fund. Or PG&E needs to run several more fire seasons without a major equipment-caused fire, so its real-world loss record improves how the market prices this risk. The strategic review can also lower the risk if it separates parts of the business from the wildfire liability. added: PG&E said on October 22, 2026 that it plans to share the outcome of the review no later than summer 2027. The CPUC plans to issue a proposed decision on November 13, 2026 on PG&E's request to recover costs from the 2019 Kincade fire and the 2021 Dixie fire. This is the first test of the prudence standard in the 2019 wildfire law, AB 1054. removed: The next earnings report comes October 22, 2026. A new legislative session starts on December 7, 2026, and a new governor takes office in January 2027. On September 30, 2026, the governor said that a reform deal may fall to his successor. This discount will probably not close before 2028, even if PG&E keeps avoiding major fires in the meantime.
- Risks
- PG&E still faces open-ended wildfire liability. Lawmakers did not pass a liability reform in 2026, so a large future fire caused by PG&E equipment could again threaten its balance sheet, as it did in 2019. After the reform bill failed on September 1, 2026, PG&E cut about $2 billion of planned 2027 capital spending and suspended its five-year capital outlook and its growth target after 2027. PG&E said the cut could delay new customer connections, such as data centers, which are central to its growth plan. More reform failures could keep forcing PG&E to scale back the growth spending its plan relies on. At removed: July 15, added: October 14, 2026, PG&E knew of about 190 lawsuits, with at least removed: 9,062 added: 9,061 plaintiffs, over the 2021 Dixie fire. PG&E says it resolved most of these claims. The court cancelled the individual trial set for December 2, 2026, and no trial is scheduled. The larger open question is cost recovery. PG&E asks the CPUC to let it recover about $1.449 billion of Kincade and Dixie fire costs that the Wildfire Fund cannot pay, plus about $329 million of repair costs, at July 31, 2026. If the CPUC finds that PG&E was not prudent, PG&E cannot recover these costs and may need to pay back part of the about $1.2 billion that the Wildfire Fund paid for the two fires. PG&E's board started a strategic review in September 2026 that could lead to major changes in how the company is structured or financed. A committee of four independent directors leads it. removed: The added: Its stated goal is an investment-grade credit rating. PG&E plans to share the outcome added: no later than summer 2027, and removed: timing of this review are added: the outcome is not yet known.
- Balance sheet
- Cash: removed: $972M added: $902M Debt: removed: $64.2B added: $65.0B Net debt: removed: $63.2B added: $64.1B Net debt / EBITDA: removed: 6.0× added: 5.9× (high) Interest cover: 3.4× Undrawn credit line: removed: $5.5B added: $4.9B Debt due within 12 months: removed: $2.5B added: $3.7B Ratings: S&P BB+ (stable outlook), Moody's Baa3 (positive outlook), Fitch BBB- (negative outlook) PG&E borrows mostly at the regulated utility, and debt is high for the cash that PG&E makes. removed: Free cash flow was about minus $4.3 billion in added: In the removed: 12 added: first nine months removed: to June 30, added: of 2026, removed: because capital spending of removed: $12.4 added: $9.6 billion was larger than operating cash flow of removed: $8.1 added: $5.8 billion, so free cash flow was about minus $3.8 billion. The CPUC lets the utility fund its rate base with 52% common equity, 47.5% long-term debt and 0.5% preferred stock, and customers pay the interest through rates. removed: Of the $61.8 added: At September 30, 2026, total debt was $65.0 billion: $2.2 billion of added: short-term borrowings, $1.5 billion of long-term debt removed: at June 30, 2026, $55.2 added: due within a year and $61.3 billion removed: sat at the utility. This added: of other long-term debt. The long-term debt includes removed: $11.6 added: $11.5 billion in special-purpose removed: entities: about $10 billion of added: entities, mostly wildfire recovery bonds that dedicated customer charges pay, and a removed: $1.75 billion receivables securitization. About $6.6 billion added: of long-term debt sat at the parent, PG&E Corporation, which pays it from utility dividends. This includes $2.15 billion of 4.25% convertible secured notes due December 1, removed: 2027, $2.0 billion of secured notes due 2028 and 2030, and $2.5 billion of junior subordinated notes. All debt due within a year and all short-term borrowings added: 2027. The rest sat at the utility. removed: On added: In August removed: 4, 2026, the utility removed: issued added: sold $1.7 billion removed: more of first mortgage removed: bonds. added: bonds and used the money to buy back or repay about $1.7 billion of bonds due in 2027. The leverage ratio and the interest cover use EBITDA of about removed: $10.6 added: $10.8 billion for the 12 months to removed: June added: September 30, 2026, calculated as pretax income plus interest, depreciation and amortization. removed: The undrawn credit is the revolving credit lines of the utility and the parent, and total added: Total liquidity was about removed: $6.5 billion. added: $5.8 billion: $902 million of cash and $4.9 billion of undrawn revolving credit. S&P still rates PG&E BB+, one step below investment removed: grade. Fitch changed its added: grade, and Fitch's outlook removed: to added: is negative removed: on added: since September 16, removed: 2026, after wildfire reform failed. The debt load and the open wildfire liability limit PG&E's choices. On September 2, 2026, added: 2026. PG&E removed: cut planned 2027 capital spending by $2 billion, with $1 billion less new debt at the utility added: says it does not expect to issue equity through 2030, and removed: $1 billion less at the parent, and said that it wants to avoid issuing shares at a low stock price. added: For 2027, it plans to fund the $11.4 billion capital plan with operating cash flow and $4 billion to $5 billion of utility debt, per the earnings call. The debt load and the open wildfire liability limit PG&E's choices. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Aug 31, 2026: California legislature votes on wildfire liability reform. Failed. Watch: A passed bill that caps liability or speeds victim payments passes; a session end with no bill fails. Outcome: The Assembly adjourned on September 1 without a vote on SB 492, and PG&E stock fell about 20% on August 31. Oct 22, 2026: Q3 2026 results: capital plan and strategic review update. removed: Pending. added: Passed. Watch: Kept 2026 and 2027 guidance and a funded capital plan without new equity passes; a guidance cut or a plan to issue equity fails. added: Outcome: PG&E reaffirmed 2026 and 2027 core EPS guidance and said it does not expect to issue equity through 2030. Nov 13, 2026 (estimate): CPUC proposed decision on Kincade and Dixie fire cost recovery. Pending. Watch: A proposed decision that finds PG&E prudent, lets it recover most of the about $1.45 billion of costs that the Wildfire Fund cannot pay, and needs no payback to the Fund passes; a finding that PG&E was not prudent, or an order to pay back the Fund, fails. Dec 7, 2026: New legislative session starts and can take up wildfire reform. Pending. Watch: A reform bill with a liability cap or a faster victim-payment fund moving forward in 2027 passes; no progress fails. added: Jan 22, 2027 (estimate): Q4 2026 results: 2026 delivery and financing plan. Pending. Watch: 2026 core EPS inside $1.64 to $1.66, kept 2027 guidance and no new equity pass; a guidance cut or a plan to issue equity fails.
- Recent events
- Oct added: 22, 2026: PG&E reported Q3 2026 results. Core EPS was $0.41, down from $0.50 in Q3 2025, mainly because of a lower allowed return on equity in 2026. Core EPS for the first nine months was $1.24, up from $1.14. PG&E reaffirmed 2026 core EPS guidance of $1.64 to $1.66 and 2027 guidance of $1.78 to $1.82. It said it does not expect to issue equity through 2030. On the call, CEO Patti Poppe said PG&E plans to share the outcome of the strategic review no later than summer 2027. This timeline comes from a call transcript. Oct 5, 2026: At an S&P Global Ratings webinar, CFO Carolyn Burke said wildfire liability legislation is PG&E's preferred path, but it is highly uncertain. She said the strategic review looks at the full range of options, which can include ring-fencing the power plant and gas businesses. She gave no timeline for the review. She said the CPUC expects to issue a proposed decision on Kincade and Dixie fire cost recovery in November. Oct 2, 2026: The CPUC judge in the Kincade and Dixie fire cost case (A.25-11-001) set an oral argument for October 26, 2026. On October 8, the judge refused a request to delay the decision and said that the evidence record is closed. Oct 1, 2026: PG&E filed a 10-year plan to put about 5,000 miles of power lines underground in high fire-risk areas from 2028 to 2037. The state Office of Energy Infrastructure Safety must approve the plan first. After that, PG&E will ask the CPUC to approve the cost. Sep 30, 2026: Governor Newsom said that a wildfire liability deal may fall to the next governor, who takes office in January 2027. He did not rule out a special session, but he did not expect a vote this year. Sep 16, 2026: Fitch Ratings changed its outlook on PG&E Corporation and the utility to negative from stable. It kept the BBB- rating. Fitch cited the failed wildfire liability reform and said more downgrades are likely without progress. Sep 11, 2026: In its CPUC brief on the Kincade and Dixie fires, PG&E asked to recover about $1.449 billion of costs that the Wildfire Fund cannot pay, plus about $329 million of system repair costs. It also asked the CPUC to confirm that PG&E does not have to pay back about $1.2 billion that the Wildfire Fund paid for the two fires by July 31, 2026. Sep 2, 2026: PG&E cut planned 2027 capital spending by about $2 billion, from $13.4 billion to $11.4 billion. It kept its 2026 core EPS guidance of $1.64 to $1.66 and gave 2027 guidance of $1.78 to $1.82. It suspended its five-year capital and rate base outlook, which was $73 billion for 2026 to 2030, and its growth target after 2027. Its board formed a committee of four independent directors for a strategic review of the company, with no timeline. Sep 1, 2026: The California Assembly adjourned without a vote on SB 492, the wildfire liability bill. The governor and legislative leaders had announced the deal in this bill on August 29. Lawmakers had removed parts of the governor's plan, such as limits on lawsuits by insurers and on damages. Aug 31, 2026: PG&E stock fell about 20% in one trading day, its worst single-day drop since March 2020. The wildfire liability bill in the legislature did not include the main parts of the reform that PG&E wanted. Jul 23, 2026: PG&E reported Q2 2026 results. Core earnings per share were $0.40, above the analyst estimate of about $0.37. Revenue was below estimates. The company reaffirmed its 2026 core EPS guidance of $1.64 to $1.66.